Tesla secures rights to land in Nevada; announces plans to mine lithium

September 25, 2020

On Sept. 22, Tesla CEO Elon Musk told shareholders that the company had secured rights to 10,000 acres in Nevada, near its Gigafactory where it aims to produce lithium from clay deposits using a process developed internally.

If successful, Tesla would become the first company in the world to commercially produce lithium from clay, however there are a number of hurdles that must be cleared before Telsa can begin producing lithium for its electric vehicle batteries, including an onerous permitting process, uncertain access to water and questions about unproven methodologies.

Currently, lithium is produced either from brine, commonly found in South America, or spodumene hard rock, usually in Australia.

Reuters reports that in Nevada, Tesla plans to mix clay with table salt and then add water, which it says causes a reaction where the salt would leach out with lithium, which can then be extracted. The leftover clay would be put back in the earth to mitigate environmental damage.

“It’s a very sustainable way of obtaining lithium,” said Musk, who did not say where in Nevada the company had obtained the lithium rights or whether development has started.

The plan drew backlash almost immediately, with critics describing Musk's plan as too simplistic and light on details. Returning rock to the earth after minerals are extracted, for instance, is already common industry practice through the use of tailings dams.

"This plan from Tesla brings up a lot more questions than it answers," said Chris Berry, an independent lithium industry consultant. "Are we just supposed to take Elon Musk's word for it that the cost will be lower than existing lithium projects?"

Nevada already has several lithium clay projects under development, including one from Lithium Americas Corp that has been seeking federal permit approval for more than a decade and another from ioneer Ltd.

Lithium Americas has said it is confident it can successfully extract lithium from clay through a process that involves acid leaching. Tesla said its process won't involve acid, fueling further questions.

Any lithium project from Tesla would require an intensive application process for necessary permits that could stretch on for years.
Tesla's plan also would likely require substantial amounts of water, forcing the company to battle with cattle ranchers for access to underground reservoirs in the arid state.

Albemarle Corp operated the only existing U.S. lithium mine at a site roughly 200 miles (322 km) north of Las Vegas until it shut it down last month.

Operational since the late 1960s, the site produced less than 5,000 tonnes of lithium per year, a relatively small amount and far less than Tesla would need.



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